Chapter 6 Allocating Resources to the Project

Introduction Projects compete with each other for resources If resource is used but not consumed, which project must wait to use resource If resource is consumed during use, may not be available for other projects or other projects must wait for replacement In either case, one project must wait One project is delayed Likewise, different activities on the same project may compete for resources Trade-offs must be made

Expediting a Project (Assumptions) Smaller problem to avoid unnecessary arithmetic Problem set in a deterministic world All estimates of task duration are based on normal (or standard) resource loadings

Expediting a Project (Approaches) The critical path method Fast-tracking a project Project expediting in practice Opportunities before the project begins Opportunities when the project is underway

The Critical Path Method Normal duration estimates Normal costs Crash duration estimates Crash costs Crash cost per day

Notes on Crashing Important to make sure the resources required to crash the project are available Technology may be used to crash an activity Using Ditch Witch to dig a ditch rather than adding more workers May have to expedite tasks not on critical path to make resources available to other projects Some tasks cannot be crashed

How to Crash Start with the normal schedule Select activities to crash, one at a time Focus on the critical path(s) Select least expensive activity to crash Calculate slope information on activities to crash

An Example of a Normal/Crash Project Table 6-1

A PERT/CPM Example of Crashing a Project, AOA Network Part 1 Figure 6-1 (Partial)

A PERT/CPM Example of Crashing a Project, AOA Network Part 2 Figure 6-1 (Partial)

CPM Crash Cost-Duration History Figure 6-2

Fast-Tracking a Project An expediting technique in which one phase of the project is started before preceding phases are completed Used in the construction industry when the building phase is started before the design and planning phases are complete This technique is particularly appropriate when large proportion of work is routine

Project Expediting in Practice Project manager may know ahead of time that this project is time-critical and needs to be finished as early as possible Project manager may during project that it needs to be finished earlier Something delays the project and time needs to be made up

Opportunities Before the Project Begins Most projects have one time estimate Many projects have a project “buffer” A project time contingency may be added as well Can monitor key activities closely May order long-lead time items early

Opportunities When the Project Is Underway Focus on critical path Use contingency time Pull resources from less critical activities Move buffers to more critical activities May skip less critical steps May postpone activities involving non-core members Move activities to post-project phase May run activities in parallel or use weekends Pressuring team to work faster Get additional resources for overtime or more people May reduce scope May wait and see

Resource Loading Refers to the amounts of specific resources that are scheduled for use on specific activities or projects at specific time It is usually presented in the form of a list or table Will see using short documentary DVD example

Project Plan and Gantt Chart for Production of a Short Documentary Film Figure 6-3 17

Gantt Chart for DVD Project, Adjusted for Client Availability Figure 6-4 18

Resource Loading Chart for DVD Production Table 6-3 19

Resource Loading Issues Most project management software assumes that any resource assigned to an activity will work on that activity 100 percent of the time available Can be resolved by allocating a specific percentage of time to project It is easy to over utilize human resources Overtime is expensive

Resource Leveling To perform resource leveling, software will move activities so that resources do not exceed their capacity Using available slack first Extending project duration where using slack does not work Project manager may not try to level all resources A working schedule may require more resources A more-or-less steady state demand for human resources is highly desirable

Resource Over Allocation Report for Scriptwriter Showing All Activities Figure 6-5 22

Graphic Resource Over Allocation Report for Scriptwriter Figure 6-6

Resource Leveled Report for Scriptwriter Showing All Activities Figure 6-7 24

Graphic Resource Leveled Report for Scriptwriter Figure 6-8

Daily Resource Loading Chart for Scriptwriter Leveled Table 6-4 26

Final Gantt Chart Schedule, Scriptwriters and Producer Leveled Figure 6-9 27

Resource Loading/Leveling and Uncertainty Holidays, vacations, sick days can reduce human resource availability Not all required facilities and equipment will be available when needed There may be change orders All of these must be factored into plans

Allocating Scarce Resources to Projects Leveling resources using slack is often not possible Software needs instructions about what priority to use when allocating scare resources When demand exceeds supply, software assigns a resource according to some priority rule selected by project manager The key problem is deciding which activities gets the scare resource and in what order

Some Priority Rules As soon as possible As late as possible Shortest task duration first Minimum slack first Most critical followers Most successors Most resources first 30

Allocating Scare Resources to Several Projects When the allocating scarce resources is extended to where several projects are being carried out concurrently, the size and complexity of the problem increase However, the nature of the underlying problem remains the same There is a decided advantage if several projects are joined as a set With several projects, we can link them together with pseudoactivities

Pseudoactivities Pseudoactivities are those which have duration but require no resources The use of pseudoactivities allows a set of projects to be linked and dealt with as though it were a single project The individual projects are interrelated by specifying predecessor/successor relationships in Microsoft Project They appear to Project to be parts of one project Allows use of Microsoft Project resource loading and leveling charts and tables 32

Multiple Projects Connected with Pseudoactivities Figure 6-11

Criteria of Priority Rules Project manager faces the problem of choosing between different outcomes that result from different priority rules Must also deal with different arrangements and durations of pseudoactivities There are many measurable criteria to help select a priority rule Schedule slippage: amount project or set of projects delayed by application of a leveling rule Resource utilization: extent to which resources are over or underworked In-process inventory: amount of unfinished work in the system

The Basic Approach Basic approach is borrowed from a manufacturing model There is a set of activities for one or more projects to be processed by a limited number of resources Not all activities require the same resources Some activities have higher priorities Some activities need more work than others Some activities must be done before others Activity start times not known exactly Activity processing times not know exactly

Resource Allocation and the Project Life Cycle Scheduling method uses rule to assign scare resources to activities Starts with most urgent and works down Process continues until no more activities quality If scarce resource is depleted before all non-critical activities are loaded, they go unsupplied They then become a higher priority in later periods

Resource Allocation and the Project Life Cycle Continued What happens if scare resource is depleted before all critical activities are assigned May borrow from another ongoing activity with slack May even deschedule the activity Can use knowledge of the project’s life cycle to help make the decision

Project or Task Life Cycles Figure 6-12

Goldratt’s Critical Chain Projects are completed faster when there are fewer of them struggling for attention from a limited set of facilities Goldratt’s focus in the Critical Chain is on a single project with multiple demands on a scarce resource The logic extends to the multiproject case without alteration Resource usage and project schedules are inextricably bound together The technological necessities that force schedules to be ordered in specific ways simultaneously force resources to be used in specific ways

Project Issues Project due dates are too often unrealistic There are too many changes made in the project’s scope Key resources and data are often unavailable when needed The budget is frequently unrealistic and therefore often exceeded It seems like my project is always in competition for resources with other projects

Critical Chain Continued It is not farfetched to conclude that the causes of these problems are generic to all types of projects Problems encountered when managing projects are strongly related to the need to trade off one project objective for another To what extent is the need to make these trade-offs are caused by human decisions and practices In other words, can more effective project management minimize the occurrence of these problems? Will examine the complaint regarding unrealistic due dates in more detail

Three Project Scenarios Figure 6-13 42

How Long? Each task takes 10 days What is the completion time for each project? All three would have the same duration of 50 days Simple project with five tasks takes the same time as complex one with 11 tasks!

Part of Problem Part of the problem is the assumption that the activity times are known with certainty Assume all activities are normally distributed Mean of 10 Standard deviation of three Each is simulated 200 times

Project Completion Time Statistics Based on Simulation Table 6-5

Analysis This example clearly demonstrates how the commonly made assumption of known activity times in practice can lead to quite unrealistic project deadlines The results would have been even more dramatic had the activities required some common resources Similarly, the results would have been more dramatic and realistic had a nonsymmetrical distribution been used to model the activity times

Estimating Task Times Workers often pad time estimates Inflated time estimates tend to create even more problems When workers finish a padded activity early, they often do not let management know they are done yet Worse, workers may perceive they have plenty of time to complete the task and therefore delay starting the task Goldratt refers to this as the student syndrome

Multitasking Multitasking is assigning team members to multiple projects and having them allocate their time across these projects There is typically a penalty or cost associated with switching from working on one project to another

Sample Project with Multitasking Figure 6-16

Alternative Gantt Charts for Projects A and B Figure 6-17

Common Chain of Events Assuming that activity times are known and that the paths are independent leads to underestimating the actual amount of time needed Because the time is underestimated, project team members tend to inflate their time estimates Inflated time estimates lead to work filling available time, workers not reporting that a task has been completed early An important caveat then becomes that safety time is usually visible to project workers and is often misused Misused safety time results in missed deadlines and milestones

Common Chain of Events Continued Hidden safety time further complicates the task of prioritizing project activities The lack of clear priorities likely results in poor multitasking Task durations increase as a result of poor multitasking Uneven demand on resources may also occur as a result of poor multitasking In an effort to utilize all resources fully, more projects will be undertaken to make sure that no resources are underutilized Adding more projects further increases poor multitasking

Resolving These Problems Goldratt suggests that the key to resolving this is to schedule the start of new projects based on the availability of bottleneck resources He further suggests that time buffers be created between the bottleneck resource and the resources that feed it He also suggests reducing the amount of safety time added to individual tasks and then adding some fraction of the safety time reduced back into the system as safety buffer for the entire project

The Critical Chain Another limitation is the dependency between resources and tasks is often ignored Using traditional approaches, A1-C1 is the critical path What if A1 and A2 are not independent Then page A1-C1 increases to 22 days

Addressing Problem Need to consider both precedence relationships and resource dependencies Goldratt proposes thinking in terms of the longest chain of consecutively dependent tasks where such dependencies can arise Referred to as critical chain There are two potential sources that can delay the project Delay in the tasks that make up the critical chain Delay in activity feeding the critical chain that results in delay of the critical chain

Project and Feeder Buffers Figure 6-19

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